Nikola filed for Chapter 11 bankruptcy protection Tuesday to sell off its assets and wind down operations, according to a securities filing and news release.
The hydrogen and electric truck manufacturer had explored other alternatives for months, the company said. But "various market and macroeconomic factors" disrupted the business, President and CEO Steve Girsky said in the announcement.
Nikola hopes to continue certain limited service to “support operations for trucks currently in the field, including certain HYLA fueling operations through the end of March 2025,” the news release said. “Thereafter, the Company will need one or more partners to support such activities.”
The business could sell all, substantially all, or a portion of its assets but still continue to operate as debtors-in-possession, the securities filing said.
The OEM has over $1 billion in liabilities but between $500 million and $1 billion in assets, according to its bankruptcy filing. The company has approximately $47 million in cash on hand, the release said.
The startup was founded in 2015, and founder Trevor Milton voluntarily resigned in 2020 following allegations that he exaggerated the trucks’ capabilities. He was found guilty of fraud in 2022 and sentenced in 2023 to four years in prison.
The company also had to pay a $125 million settlement with the Securites and Exchange Commission to resolve allegations that it “defrauded investors by misleading them about its products, technical advancements, and commercial prospects.”
The business was positioning itself to be a leader in zero-emission trucks and creating an ecosystem for hydrogen refueling and battery charging.
As part of that energy transition, the company pointed to federal funding and Biden administration policy helping that effort, as well as Advanced Clean Trucks regulations from California and several other states suggesting support in that direction, according to an annual report.
Alternative energy OEMs were seeking to bring the cost down on vehicles, but that approach has come into conflict with Trump administration policy to freeze funding for EV charging stations and end EV mandates.
Competitor Hyzon announced in December that it planned to liquidate its business.
In all, Nikola distributed hundreds of its battery electric trucks to 19 fleet customers as of last month, who completed over 1 million service miles. Its hydrogen fuel cell truck launched in 2023, generating 35 customers that year.
“With the dedication of our employees and support from our partners, Nikola has taken significant steps to move zero-emissions transportation forward, including bringing the first commercially available Class 8 hydrogen fuel cell electric trucks to market in North America and developing the HYLA hydrogen refueling highway, connecting Northern California to Southern California,” Girsky said in the bankruptcy announcement.
But setbacks included fire risks with its electric trucks and Arizona plant, triggering a costly recall in August 2023 to replace battery packs. The company had hoped to complete the recall by the end of last year but extended that into the first half of 2025.
“To date, the Company has incurred losses of more than $44 million relating to the voluntary recall,” Girsky said in a bankruptcy filing statement. “The total negative impact from all recall-related activity is expected to be approximately $56 million.”
